the last thing I want to do is take my Dad down

[Viki.W]

I am new to the forum, actually never been on any type of forum so hope I post correctly. I asked a question the other day and you all kindly answered it for me. I have another question if anyone out there can help.

I have considered entering into an IVA after much research. I haven't actually approached a company yet as I am waiting for my accountant to supply me with accounts (I am a self-employed restaurant owner). I have one huge problem. A couple of years ago I was really struggling with debt and I followed the advise of my accountant who suggested a loan from my Dad, who had helped me a lot financially in the past, to pay all my debts off. I had never heard of debt management plans or IVAs so I thought getting one big loan (148,750.00) was the only way. My Dad offered to remortgage his house for me, which he did through the accountant's financial advisor friend. (looking back now I was such an idiot!) My Dad has quite a good company pension (he's 70) so got a good fixed five year deal with Nationwide on a twenty year mortgage. I pay him the £999.74 every month.

This loan didn't pay all my debts off and you can guess what happened next, yes, I still couldn't afford to pay my debts and took more loans out and used more credit cards.

My husband and I couldn't afford to keep our house so we sold it and moved in with my Dad after he very kindly offered. We came out with about £18,000 so paid some of the debt off.

My question is, if I do enter an IVA, will my other creditors allow me to keep paying the full amount of £999.74 per month to my Dad for the mortgage or will thay see this as favouring one creditor over another.

I cannot believe the mess I have got myself into, I am embarrased and the last thing I want to do is take my Dad down with me.

Any advise would be greatly appreciated.

Kind regards.

[luluj]

Don't panic am sure some of the experts will answer shortly.

If you sold the house and came out with £18000, then I presume you are still paying your dad nearly £1000 a month to repay him the money that you owed him?

Firstly my advise would be to make sure your dad is aware of the situation. Would he be prepared for you to "hold his payments" so that you can make payments to your other creditors until they have been cleared via an IVA or is he not in a position to do so.

Bankruptcy may be an option...however your dad would not receive anything via this route until after you had been discharged if my understanding is correct, but it may be quicker than a five year IVA route!

Keep smiling - 5 payments down - 55 to go!

[MelanieGiles]

Aren't you just paying £999 per month rent to your Dad for living in his property? If so, that will be an allowable expense in the IVA, but you will need to fully disclose the history surrounding this sum, so that your creditors can take a view as to whether this is reasonable.

If you are paying rent on top of this, then I am afraid that legally your Dad is a creditor, and will have to be included as such in any subsequent insolvency.

Did Dad receive the benefit of independent legal advice when he mortgaged his house for you, and was he made fully aware of the risk in the event that you were not able to pay him?

[Viki.W]

Thank you for replying.
I am not paying rent to my Dad,just repaying the "loan". He understands our situation and has asked us to pay two thirds of the bills, he will pay any house maintenance costs ie. if anything needs replacing or fixing throughout the year, but he does not want rent for as long as we are there. I suppose that will be forever now. My Mum died a few years ago and he says we liven the house up again, so he's happy with the arrangement. He didn't take independent legal advise but he did know the risk involved. I guess that's why I want to make sure he can still get his mortgage payments from me for the next twenty years. He says he can't afford to pay them himself. I have a home made loan agreement with him that we both signed and was also signed by a witness when I took the loan so if the IVA people will accept that and £999 is not seen as too much rent that would be a weight off my mind.

Could anyone please give me any advise on who to see regarding a possible IVA. I am in Liverpool but will travel. Thanks
Kind regards.

[luluj]

then call it "rent" to your dad and not repaying the loan and you should be fine!

[Viki.W]

Thanks Lulu, I feel a little bit better now. Have a lovely day.

[MelanieGiles]

I am sure that this would be legitimate for you to put forward - Dad has a loan - you pay him rent at market value - he uses the money to repay the loan. Can't see anything wrong with that, but do check out the price of rented property in your area to ensure that there is no hint of preference.

[Soulgrowth]

Just wanted to say good luck VW ... to every problem there's a solution ... somewhere [:)]

Debbie

[Viki.W]

Thanks Debbie, you're all so nice. I can't talk to anyone abount this so it heps to have joined this forum. I will let you know how I get on. Kind regards.

[Reviva UK]

Hi V.W.
just read your last post and wanted to drop you a quick note to encourage you to speak to someone about this.

Debt is a nasty business and it will eat you alive if you let it. Stress, selationships, job etc etc .

You can take back control and with help it can be managed.

melanie says that a problem shared is a lot easier to manage than struggling on by yourself.

This week we were engaged by new client that was encouraged to sort his problem out because a cousin had just committed suicide because of debt! Wife & family left behind.

Call melanie and get yourself sorted out. remember the longer you leave it to call the longer it will be before you have peace of mind.

Good luck

[Soulgrowth]

Yes Paul ... I fairly reguarly deal with the ultimate consequences of debt in my day to day vocation (see my website link) ... and it really isn't worth it ... IT'S ONLY MONEY [:(]

The most important thing VW is that you are taking control of your situation by facing up to it and seeking help ... so stay around the Forum as we are all here for you ... experts and those of us who have and are personally experiencing the 'journey' that is dealing with our debt situation.

Thinking of you.

Debbie

[Viki.W]

Hi to all,

I have a question please if anyone can help.

I have decided to sell my restaurant which has been making a loss for the last two years as the coming years projections are not enough to make a living and pay our debts. I have 82k unsecured debt and do not own my own home (please see my other posts to explain the mess I'm in!) My question is, can I try and apply for an IVA until my business is sold and then pay all the debts off fully with the sale or would that be classed as a variation, would I be better just telling the bank and credit card companies that I can pay them back when I sell and just make token payments. I obviously have no idea when it will sell.

At the moment I have paid all my payments to credit cards, bank on time and my VAT is all up to date and I haven't paid tax for the last two years because no profit. I realise that the only reason my credit score is probably so good is that I use one to pay the other! I don't want to do that anymore. The business isn't limited.

Any advice would be greatly appreciated, thanks, v.w

[Viki.W]

sorry, should have started a new topic for this question, i hit "ask a debt question! DOH! I'll get used to it!

[MelanieGiles]

An IVA would work on the basis of a sale at some time in the future, but you would need to set a realistic timescale for sale which I would suggest at a year.

What value do you put on the business, if it has been making losses for the last two years, and are there any tangible assets?

[Viki.W]

Thanks for replying Melanie,

I am having business valued next week but my new accountant and one of the valuers who helped me out in the past have both said that they think at least £100k, this is based on fixtures, fittings, stock etc and apparently doesn't matter if it is currently making a loss, obviously it would have been worth more if it had been making a profit. Do you think that it is worth proposing an IVA now? I think I have all information needed as I have been reading this forum for a while now so it would be great to start taking control of everything. As I am self employed, do I need to travel to see you? Thanks for your help.